SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2014
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-55065
SGREP INC.
(Exact name of registrant as specified in its charter)
PATH RUN ACQUISITION CORPORATION
(Former name of registrant as specified in its charter)
Delaware 46-3621067
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 Veterans Memorial Highway SE
Suite 134-217
Mableton, Georgia 30126
(Address of Principal Executive Offices)
215 Apolena Avenue
Newport Beach, California 92662
(Former Address of Principal Executive Offices)
844-422-0975
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer Smaller reporting company X
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
April 30, 2014
Common Stock, par value $0.0001 1,499,999
Documents incorporated by reference: None
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FINANCIAL STATEMENTS
Condensed Balance Sheets as of March 31, 2014 (unaudited)
and December 31, 2013 1
Condensed Statements of Operations for the Three Months
Ended March 31, 2014 and for the Period from July 2, 2013
(Inception) to March 31, 2014 (unaudited) 2
Condensed Statements of Cash Flows for the Three Months
Ended March 31, 2014 and for the Period from July 2, 2013
(Inception) to March 31, 2014 (unaudited) 3
Condensed Statement of Changes in Stockholders' Equity 4
Notes to condensed Financial Statements (unaudited) 5-8
______________________________________________________________________
PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2014 2013
------------ ----------
(unaudited)
Current assets
Cash $ 2,000 $ 2,000
------------ -----------
Total assets $ 2,000 $ 2,000
============ ===========
LIABILITIES AND SSTOCKHOLDERS' EQUITY
Accrued liabilities $ 1,150 $ 400
------------ -----------
Total liabilities 1,150 400
------------ -----------
Stockholders' equity
Preferred stock, $0.0001 par value,
20,000,000 shares authorized; none
issued and outstanding - -
Common stock, $0.0001 par value, 100,000,000
shares authorized; 20,000,000 shares and
outstanding 2,000 2,000
Additional paid-in capital 257 257
Deficit accumulated during the
development stage (1,407) (657)
------------ -----------
Total stockholders' equity 850 1,600
------------ -----------
Total liabilities and stockholders'
equity $ 2,000 $ 2,000
============ ===========
The accompanying notes are an integral part of these condensed
financial statements
2
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PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(unaudited)
For the periods
For the three from July 2,
months ended 2013 to
March 31, 2014 March 31, 2014
-------------- -----------------
-------------- -----------------
Revenue $ - $ -
Operating expenses 750 1,407
Income tax - -
-------------- -----------------
Net loss $ (750) (1,407)
============== =================
Loss per share -
basic and diluted $ (0) (0)
============== =================
Weighted average shares-
basic and diluted 20,000,000 20,000,000
============== =================
The accompanying notes are an integral part of these condensed financial statements
3
______________________________________________________________________
PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
For the
period from
For the three July 2, 2013
months ended (Inception) to
March 31, 2014 March 31, 2014
------------- --------------
OPERATING ACTIVITIES
Net loss $ (750) $ (1,407)
Changes in Operating Assets and
Liabilities
Accrued liablities 750 1,150
------------- --------------
Net cash used in operating activities 0 (257)
------------- --------------
CASH FLOWS (USED) BY INVESTING ACTIVITIES
Acquisition of Intangible Assets 0 -
Capital Expenditures - -
------------- --------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 0 2,000
Proceeds from stockholders' additional
paid-in capital 0 257
------------- --------------
Net cash provided by financing
activities 0 2,257
------------- --------------
Net increase in cash 0 2,000
Cash, beginning of period 2,000 -
============= ==============
Cash, end of period $ 2,000 2,000
============= ==============
The accompanying notes are an integral part of these condensed
financial statements
4
______________________________________________________________________
PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Additional During the Total
----------------------- Paid-In Development Stockholders'
Shares Amount Capital Stage Equity
Balance, July 2,
2012 (Inception) - $ - $ - $ - $ -
Issuance of common stock 20,000,000 2,000 - - 2,000
Additional paid-in
capital - - 257 - 257
Net loss - - - (657) (657)
========== ======== ======= ========= =========
Balance,
December 31, 2013 20,000,000 $ 2,000 $ 257 $ (657) $ 1,600
Net loss - - - (750) (750)
---------- ------- ------- -------- ---------
Balance, March 31, 2014 20,000,000 2,000 257 (1,407) 850
========== ======== ======= ========= =========
The accompanying notes are an integral part of these condensed
financial statements
5
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PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
NATURE OF OPERATIONS
Path Run Acquisition Corporation ("Path Run" or "the Company") was
incorporated on July 9, 2013 under the laws of the state of Delaware to
engage in any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. The Company has been in the
developmental stage since inception and its operations to date have been
limited to issuing shares to its original shareholders. The Company will
attempt to locate and negotiate with a business entity for the combination
of that target company with Path Run. The combination will normally
take the form of a merger, stock-for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish to structure the
business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue
Code of 1986, as amended. No assurances can be given that the Company
will be successful in locating or negotiating with any target company.
The Company has been formed to provide a method for a foreign or domestic
private company to become a reporting company with a class of securities
registered under the Securities Exchange Act of 1934.
DEVELOPMENT STAGE ENTERPRISE
The Company has not earned any revenue from operations since inception.
Accordingly, the Company's activities have been accounted for as those of
a "Development Stage Enterprise" as set forth in ASC 915, "Development
Stage Entities." Among the disclosures required by ASC 915, are that the
Company's financial statements be identified as those of a development
stage company, and that the statements of operations, stockholders' equity
and cash flows disclose activity since the date of the Company's inception.
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") for interim financial information. Accordingly, they
do not include all of the information and notes required by U.S. GAAP
for complete financial statements. The accompanying unaudited financial
statements include all adjustments, composed of normal recurring
adjustments, considered necessary by management to fairly state our
results of operations, financial position and cash flows. The operating
results for interim periods are not necessarily indicative of results
that may be expected for any other interim period or for the full year.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with
original maturities of 90 days or less. The Company did not have cash
equivalents as of March 31, 2014.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash. The Company
places its cash with high quality banking institutions. The Company did
not have cash balances in excess of the Federal Deposit Insurance
Corporation limit as of March 31, 2014.
5
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PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
INCOME TAXES
Under ASC 740, "Income Taxes", deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Valuation allowances are established
when it is more likely than not that some or all of the deferred tax assets
will not be realized. As of March 31, 2014, there were no deferred taxes
due to the uncertainty of the realization of net operating loss or carry
forward prior to expiration.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by
dividing net loss by the weighted average number of common shares
outstanding during the period. Diluted loss per common share reflects
the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the loss
of the entity. As of March 31, 2014, there are no outstanding dilutive
securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value
measurements of financial assets and financial liabilities and for fair value
measurements of nonfinancial items that are recognized or disclosed at fair
value in the financial statements on a recurring basis. The guidance
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to
measurements involving significant unobservable inputs (Level 3
measurements). The three levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Company has the ability to access at
the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The Company monitors the market conditions and evaluates the fair value
hierarchy levels at least quarterly. For any transfers in and out of the levels
of the fair value hierarchy, the Company elects to disclose the fair value
measurement at the beginning of the reporting period during which the
transfer occurred.
6
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PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 2 - GOING CONCERN
The Company has not yet generated any revenue since inception to date
and has sustained operating losses during the period ended March 31,
2014. The Company had working capital of $850 and an accumulated
deficit of $1,407 as of December 31, 2013. The Company's continuation as
a going concern is dependent on its ability to generate sufficient cash
flows from operations to meet its obligations and/or obtaining additional
financing from its members or other sources, as may be required.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern; however, the above
condition raises substantial doubt about the Company's ability to do so.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result should
the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will
require additional working capital from either cash flow from operations
or from the sale of its equity. However, the Company currently has no
commitments from any third parties for the purchase of its equity. If
the Company is unable to acquire additional working capital, it will be
required to significantly reduce its current level of operations.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
Not Adopted
In April 2013, the FASB issued ASU No. 2013-07, Presentation of
Financial Statements (Top 205): Liquidation Basis of Accounting. The
objective of ASU No. 2013-07 is to clarify when an entity should apply
the liquidation basis of accounting and to provide principles for the
measurement of assets and liabilities under the liquidation basis of
accounting, as well as any required disclosures. The amendments in this
standard are effective prospectively for entities that determine liquidation
is imminent during annual reporting periods beginning after December 15,
2013, and interim reporting periods therein. We are evaluating the effect,
if any, adoption of ASU No. 2013-07 will have on our financial statements.
Other recent accounting pronouncements issued by the FASB (including
its Emerging Issues Task Force) and the United States Securities and
Exchange Commission did not or are not believed by management to have
a material impact on the Company's present or future financial statements.
7
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PATH RUN ACQUISITION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 4 STOCKHOLDER'S EQUITY
On July 9, 2013, the Company issued 20,000,000 common shares to two
directors and officers for $2,000 in cash.
The Company is authorized to issue 100,000,000 shares of common stock
and 20,000,000 shares of preferred stock. As of March 31, 2014,
20,000,000 shares of common stock and no preferred stock were issued
and outstanding.
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Path Run Acquisition Corporation was incorporated on
Julu 2, 2013 under the laws of the State of Delaware to engage in
any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions.
Since inception Path Run has been in the developmental stage
and its operations to date of the period covered by this report have
been limited to issuing shares of common stock to its original shareholders
and filing a registration statement on Form 10 on September 30, 2013 with
the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934 as amended to register its class of common stock.
Path Run has no operations nor does it currently engage in any
business activities generating revenues. Path Run's principal
business objective is to achieve a business combination with a target
company.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. In most instances the target
company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368
of the Internal Revenue Code of 1986, as amended.
No assurances can be given that Path Run will be successful in
locating or negotiating with any target company.
The most likely target companies are those seeking the perceived
benefits of a reporting corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use securities
for acquisitions, providing liquidity for shareholders and other factors.
Business opportunities may be available in many different industries and
at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
difficult and complex.
The search for a target company will not be restricted to any specific
kind of business entities, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or in
essentially any stage of its business life. It is impossible to predict
at this time the status of any business in which the Company may become
engaged, whether such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer.
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization,
joint venture, licensing agreement or other arrangement with another
corporation or entity. On the consummation of a transaction, it is likely
that the present management and shareholders of the Company will no longer
be in control of the Company. In addition, it is likely that the officer
and director of the Company will, as part of the terms of the business
combination, resign and be replaced by one or more new officers and
directors.
As of March 31, 2014, Path Run had not generated revenues and had
no income or cash flows from operations since inception. At March 31,
2014, Path Run had sustained net loss of $750, and had a deficit
accumulated during the development stage of $1,407.
The Company's independent auditors have issued a report raising
substantial doubt about the Company's ability to continue as a going concern.
At present, the Company has no operations and the continuation of Path Run
as a going concern is dependent upon financial support from its stockholders,
its ability to obtain necessary equity financing to continue operations
and/or to successfully locate and negotiate with a business entity for the
combination of that target company with Path Run.
SUBSEQUENT EVENT
Subsequent to the period covered by this report, on April 23, 2014, the
following events occurred which resulted in a change of control of the Company:
The Company redeemed an aggregate of 19,500,000 of the then
20,000,000 shares of outstanding stock at a redemption price of $.0001
per share for an aggregate redemption price of $1,950.
The Company issued 999,999 shares of its common stock pursuant to
Section 4(2) of the Securities Act of 1933 at par representing 66.67% of
the then total outstanding 1,499,999 shares of common stock as follows:
333,333 IMIR Management LLC
666,666 NFA Securities L3C
James M. Cassidy and James McKillop resigned as the Company's
president, secretary and director and vice president and director, respectively.
Joshua J. Griggs was named as the director of the Company and was
appointed its President and sole officer.
The Company changed its name to SGREP Inc. The Company filed a Form
8-K reporting these events.
The Company anticipates that it will develop its business with a
combination with a private company or through the development of its business
plan. The Company anticipates to become a real estate investment and
operating company specializing in the acquisition of net leased real estate
assets to industry-leading Fortune 1,000 companies performing globally. To
date, the Company has no operations and no agreements have been executed.
If the Registrant makes any acquisitions, mergers or other business
combination, it will file a Form 8-K.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Information not required to be filed by Smaller reporting companies.
ITEM 4. Controls and Procedures.
Disclosures and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as of the end of the
period covered by this report under the supervision and with the
participation of the Company's principal executive officer (who is
also the principal financial officer).
Based upon that evaluation, he believes that the Company's
disclosure controls and procedures are effective in gathering, analyzing
and disclosing information needed to ensure that the information
required to be disclosed by the Company in its periodic reports is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and
communicated to the issuer's management, including its principal executive
and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
This Quarterly Report does not include an attestation report of
the Company's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Controls
There was no change in the Company's internal control over
financial reporting that was identified in connection with such
evaluation that occurred during the period covered by this report
that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
`ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company
is unaware of such proceedings contemplated against it.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued 20,000,000
common shares pursuant to Section 4(2) of the Securities Act of 1933
for an aggregate purchase price of $2,000 as folllows:
On July 2, 2013, the Company issued the following shares of
its common stock:
Name Number of Shares Consideration
James Cassidy 10,000,000 $ 1,000
James McKillop 10,000,000 $ 1,000
Subsequent to the period covered by this Report, the Company
redeemed an aggregate of 19,500,000 shares of its outstanding common
stock from its two shareholders and issued the following shares:
333,333 IMIR Management LLC
666,666 NFA Securities L3C
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SGREP INC.
By: /s/ Joshua J. Griggs
President, Chief Financial Officer
Dated: May 16, 2014